Jayshelyn Construction Co., Ltd.

Jayshelyn Construction Co., Ltd.

1226th Commissioners' Meeting (2015)

Case:

Jayshelyn Construction violated of the Fair Trade Law by posting false advertisements for the “Jayshelyn Shui Li Fang” housing project

Keyword(s):

Swimming pool, name of enterprise, building regulations

Reference:

Fair Trade Commission Decision of May 6, 2015 (the 1226th Commissioners’ Meeting), Disposition Kung Ch’u Tzu No. 104034

Industry:

Real Estate Development (6700)

Relevant Law(s):

Paragraph 1 of Article 21 of the Fair Trade Law

Summary:

The FTC received a letter from a private citizen complaining that he purchased the 25F of Building B of the Jayshelyn Shui Li Fang” housing project from Jayshelyn Construction Co., Ltd. (hereinafter referred to as Jayshelyn Construction) on Dec. 26, 2009. Previously, an advertisement for the project claimed there would be a 22-ping rooftop private garden with a swimming pool (hereinafter referred to as Ad A) and pictures of a 12-meter swimming pool were also displayed (hereinafter referred to as Ad B). Jayshelyn Construction also posted an advertisement including the wording of “12-meter pool, your private 22-ping rooftop swimming pool garden” (hereinafter referred to as Ad C) on Facebook in February 2014. After inspecting the pictures and text attached to the use permit, it was suspected that Jayshelyn Construction had marked the balcony area as the swimming pool and the practice was in violation of Article 21 of the Fair Trade Law.

Findings of the FTC after investigation: Ad A, Ad B and Ad C were used from Jan. 1 2009 to Dec. 31, 2010. The informer did not provide any evidence indicating Jayshelyn Construction and Jayshelyn Advertising Co., Ltd. (hereinafter referred to as Jayshelyn Advertising) continued to use Ads A and B after Dec. 31, 2010 and the FTC also did not find any evidence showing Jayshelyn Construction and Jayshelyn Advertising continued to Ads A and B after the aforesaid period. Therefore, the three-year period in which the two companies could be sanctioned for use of Ads A and B already expired on Dec. 31, 2014. The FTC could only sanction the two companies if Ad C actually involved false advertising.

Grounds for disposition:

(1) Jayshelyn Construction provided the construction funding and constructed the housing project in question and delegated Jayshelyn Advertising to design the advertisements and market the units. Jayshelyn Advertising stated that Ad C had been approved by Jayshelyn before it was used. At the same time, according to articles 15 and 16 of the advertising production agreement signed between the two companies, it was the responsibility of Jayshelyn Construction to supervise and review the production and use of Ad C. Consequently, Jayshelyn Construction apparently could not shirk its advertiser’s responsibility by claiming that it did not have any knowledge about Ad C. Meanwhile, since Jayshelyn Advertising produced Ad C, used it to market the housing project and profited from it, the company also had to be considered an advertiser of Ad C.

(2) In February 2014, Jayshelyn Construction posted on Facebook an advertisement claiming “pool lanes...sole ownership...private rooftop swimming pool.” The combination of “swimming pool” and “pool lanes” could make consumers think the “swimming pool” was a legal facility for the residents to use and therefore make purchasing decisions. However, according to the Public Works Department of New Taipei City Government, the area indicated as for the swimming pool had originally been ratified to be used for “balcony.” If the construction company wanted to change the “balcony” into a swimming pool, it would have to file a separate application for change of use permit and a miscellaneous license.

(3) Jayshelyn Construction admitted that the company had never applied for change of use permit and a miscellaneous license, nor did it have any plan to do so. Hence, the claim in the advertisement saying there would be a “swimming pool” was a change of use without the permission of the competent authority of buildings. The pool could end up being dismantled because it was in violation of building regulations. In other words, the content of the advertisement was inconsistent with facts and the difference was beyond what regular consumers could accept. It could also lead to mistaken perceptions and wrong decisions. Therefore, the practice was a false, untrue and misleading representation with regard to content and use of product in violation of Paragraph 1 of Article 21 of the Fair Trade Law. For this reason, the FTC imposed an administrative fine of NT$1 million on Jayshelyn Construction and NT$600,000 on Jayshelyn Advertising.

Appendix:

Jayshelyn Construction Co., Ltd.'s Uniform Invoice Number: 28006602
Jayshelyn Real Estate & advertising Co., Ltd.'s Uniform Invoice Number: 86159963

Summarized by Tseng, Huei-Yi; Supervised by Yang, Hsiu-Yun

(1)	Jayshelyn Construction provided the construction funding and constructed the housing project in question and delegated Jayshelyn Advertising to design the advertisements and market the units. Jayshelyn Advertising stated that Ad C had been approved by Jayshelyn before it was used. At the same time, according to articles 15 and 16 of the advertising production agreement signed between the two companies, it was the responsibility of Jayshelyn Construction to supervise and review the production and use of Ad C. Consequently, Jayshelyn Construction apparently could not shirk its advertiser’s responsibility by claiming that it did not have any knowledge about Ad C. Meanwhile, since Jayshelyn Advertising produced Ad C, used it to market the housing project and profited from it, the company also had to be considered an advertiser of Ad C.
(2)	In February 2014, Jayshelyn Construction posted on Facebook an advertisement claiming “pool lanes...sole ownership...private rooftop swimming pool.” The combination of “swimming pool” and “pool lanes” could make consumers think the “swimming pool” was a legal facility for the residents to use and therefore make purchasing decisions. However, according to the Public Works Department of New Taipei City Government, the area indicated as for the swimming pool had originally been ratified to be used for “balcony.” If the construction company wanted to change the “balcony” into a swimming pool, it would have to file a separate application for change of use permit and a miscellaneous license.
(3)	Jayshelyn Construction admitted that the company had never applied for change of use permit and a miscellaneous license, nor did it have any plan to do so. Hence, the claim in the advertisement saying there would be a “swimming pool” was a change of use without the permission of the competent authority of buildings. The pool could end up being dismantled because it was in violation of building regulations. In other words, the content of the advertisement was inconsistent with facts and the difference was beyond what regular consumers could accept. It could also lead to mistaken perceptions and wrong decisions. Therefore, the practice was a false, untrue and misleading representation with regard to content and use of product in violation of Paragraph 1 of Article 21 of the Fair Trade Law. For this reason, the FTC imposed an administrative fine of NT$1 million on Jayshelyn Construction and NT$600,000 on Jayshelyn Advertising.